Time Value of Money and Investment.
- What's the difference between Present Value and Future Value?
- Compare the future value after 5 years of $15,000 invested and earning straight annual interest of 6% vs. the future value of $15,000 invested for 5 years at 6% compounded quarterly. What accounts for the difference?
- What is "opportunity cost" and what does it refer to in describing an investment decision? Give an example.
- What are the three different methods an organization might use to evaluate large dollar, multi-year investment decisions? What are the strengths and limitations of each method?